TUI sees cash outflows in final quarter after refund payouts
Tui AG
€7.91
17:30 07/01/25
Travel giant TUI said it continued to anticipate low single-digit hundreds million of cash outflow per month for the final quarter of the financial year after paying out more refunds to customers in August and September.
The company added that its winter 20/21 programme has been further reduced by 20% to around 40% of adjusted capacity reflecting the current uncertainty relating to travel restrictions.
TUI said liquidity stood at €2bn euros on September 20, down from €2.4bn euros in mid August after paying out more in customer refunds.
“We are currently 30% sold for the adjusted winter capacity, broadly in line with this time last year. Compared to the normal levels of prior year, bookings are currently down 59%, in line with adjusted capacity and ASP is up 3%,” the company said on Tuesday in a trading update ahead of full year results.
The company said its 8000 job cuts programme was close to identifying the planned €300m-a-year savings as it recorded a massive 83% fall in summer bookings due to Covid travel bans and quarantines
TUI UK last week committed to pay any outstanding refunds for package holidays cancelled because of the coronavirus pandemic by September 30 after the regulator was swamped with complaints from customers that it was not paying out within the 14 days required under consumer protection law.
The company on Tuesday said it had been impacted by “continuous changes in travel advice by various governments across our markets”.
“We have adapted by remixing and trimming our Q4 capacity from 30% to 25%, to alternative low-risk destinations, enabling many customers to continue their holidays as planned,” TUI said.
“We expect travel advice by each regional government to remain highly fluid, and we subsequently expect short term bookings to continue until customers are able to plan with more certainty. Where possible, we would prefer to see a regional risk assessment policy being applied by each government rather than a blanket travel policy.”
It also called for testing to be made more available on arrival in destination and on departure to avoid compulsory quarantine and movement restrictions.
The company added that it had secured a compensation deal with Boeing over the grounded 737 Max programme following the two fatal crashes at Lion Air and Ethiopian Airlines. Boeing will pay TUI compensation for three years and defer the delivery of 61 planes allowing the travel firm to adjust fleet capacity based on the Covid crisis develops.